Suva City Council Staff Association v Suva City Council [2004] FJAT 25; Award 19 of 2004 (6 July 2004)

THE REPUBLIC OF THE FIJI ISLANDS

NO. 19 OF 2004

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

SUVA CITY COUNCIL STAFF ASSOCIATION

AND

SUVA CITY COUNCIL

SCCSA: Mr Jale Toki
SCC: Ms T Waqanika and Mr P Prasad

DECISION

This is a dispute between the Suva City Council Staff Association (the Association) and Suva City Council (the Employer) concerning the termination of employment of Mrs Vidyawati (the "grievor") by the Employer on 9 April 2003.

On 14 April 2003 a trade dispute was reported to the Permanent Secretary and accepted on 30 April 2003. The Dispute was referred to a Disputes Committee. A consensus resolution was not reached and as a result the Minister authorized the Permanent Secretary to refer the Dispute to an Arbitration Tribunal for settlement pursuant to section 5A(5) (a) of the Trade Disputes Act Cap.97.

The Dispute was referred to the Permanent Arbitrator on 28 July 2003 with the following terms of reference:

".... For settlement over the termination of Mrs Vidyawati by the Town Clerk/Chief Executive (CEO) on 10/4/03. The Union claimed that the actions of the Employer breached the Preamble of the Master Agreement section VI Clause 17. The Union further contends that the letter of termination dated 19/04/03 also breached the grievance procedure 17(d). The Union therefore demands that the termination of Mrs Vidyawati be withdrawn without loss of pay and other benefits".

The Dispute was listed for preliminary hearing on 12 August 2003. On that day the parties were directed to file preliminary submissions by 30 September and the final hearing was fixed for 1 October 2003.

On 1 October 2003 the Tribunal was requested to rule on a preliminary issue on whether the Employer could terminate by operation of law once a third warning is issued pursuant to the provisions of the Collective Agreement made by the parties.

On 9 October 2003 the Tribunal delivered a Preliminary Ruling on the issue indicating that the parties had not sufficiently addressed this issue in their preliminary submissions. The Tribunal granted the parties a further 14 days to file supplementary preliminary submissions and thereafter a preliminary ruling would be given on notice.

Due to the appointment of a new Permanent Arbitrator it became necessary to relist this Dispute for mention on 19 January and 3 March 2004. The Dispute was subsequently listed for hearing on 9 March 2004.

When the Dispute came on for hearing the Employer called Mr Jone Tabuya, Director Finance at the Council. The Association called the grievor Ms Vidyawati to given evidence.

The hearing continued into a third day and at the conclusion of the evidence on 11 March 2004 the parties requested and were granted leave to file final submissions. The Employer filed submissions on 1 April 2004 and the Association filed its final submission on 16 April 2004.

The terms of reference determine the limits of the jurisdiction of this Tribunal in the settlement of a trade dispute. In the present Dispute the reference requires the settlement of a trade dispute over the termination of employment of Mrs Vidyawati. The Tribunal is required under the reference to determine whether the actions of the employer breached the Preamble to clause 17 of section VI and also to determine whether the letter of termination dated 9 April 2003 breached clause 17 (d) of the grievance procedure.

Although not forming part of the Reference, by virtue of section 25 of the Trade Disputes Act Cap 97, the Tribunal must also consider any relevant provisions of the Employment Act Cap.92. The Tribunal must also consider the relevant common law principles relating to summary dismissal.

It would appear that the Reference has mistakenly referred to the date of termination as being on 10 April 2003 and the letter of termination as being dated 19 April 2003. It is clear from the material which was placed before the Tribunal that the relevant correspondence to the grievor from the Town Clerk/Chief Executive Officer is dated 9 April 2003 and that the termination was to be effective from the same date.

At this stage it would be useful to quote the last two paragraphs of the termination correspondence:

"Accordingly I have no other recourse but to regretfully terminate your employment with the Council in accordance with Section VI clause 16 (a), (c) and (e) of the Master Agreement between the Council and the Suva City Council Staff Association.

In this regard the termination of your employment will be immediately effective at the close of business hours today, that is 4.15pm 9 April 2003 and as such all which is due to you in terms of your employment conditions will be paid to you".

It should be noted that clause 16 deals with disciplinary proceedings. Clause 16(a), so far as is relevant, provides:

"Employment is conditional on the employee continuing to render satisfactory service. An employee failing in this respect or committing a breach of discipline may have his employment terminated or be liable for such lesser penalty as hereinafter provided".

Clause 16(c) deals with warnings and provides:

"After due investigation under the authority of an Officer-in-Charge, a formal warning in writing may be administered to an employee in varying degrees of severity setting out the nature of the offence. On the commission of a third offence and where an employee has already had two such warnings he or she may be liable to disciplinary action under clause (e) of Section VI of the Master Agreement.

Provided that no warnings shall be held against an employee for a period exceeding 24 months.

A copy of all warning letters shall be sent to the Association at the same time as the letter is given to the employee."

Clause 16 (e) of Section VI deals with dismissal and provides:

"The Employer will not dismiss an employee summarily except in the following circumstances:-

(i) Where an employee is guilty of misconduct inconsistent with the fulfillment of the express or implied conditions of his contract of service.

(ii) For willful disobedience to lawful orders given by the Employer.

(iii) For habitual or substantial neglect of his duties.

(iv) For continual absence from work without the permission of the employer and without other reasonable excuse".

These four instances when summary dismissal may occur are in identical terms to four of the five instances when summary dismissal may take place pursuant to section 28 of the Employment Act Cap.92.

The Association challenges the termination for non-compliance with the grievance procedure set out in clause 17 of section VI on the basis that alleged breaches of the disciplinary procedures set out in clause 16 amount to a grievance.

The preamble to Clause 17 which is headed "Grievance Procedure", provides:

"Whenever any grievance, dispute or difference arise, either out of the application or interpretation of the Agreement, or from any other cause, all work shall continue normally and all concerned will make sincere attempt to settle the matter in accordance with the following procedure".

Clause 17 (d) provides:

"If Agreement is not reached then the matter will be referred to a conference between the President or the Secretary of the Staff Association or their nominee and the Lord Mayor or his nominee, when both sides will be entitled to adduce evidence to prove the matters in dispute. The Town Clerk/Chief Executive Officer and the Personnel Manager will be in attendance".

The applicability of the grievance procedure set out in clause 17 to discipline cases was discussed in Award No.7 of 2000 wherein the Tribunal observed at page 20:

"The Tribunal also finds no basis for the Association’s argument regarding the necessity for the Council to follow the grievance procedure in cases involving discipline. Nothing in the agreement or elsewhere supports such an interpretation. The grievance procedure exists to deal with grievance between the Association and the Council. A suspected or actual disciplinary offence by an individual employee is not a grievance between the Council and the Association, although the Council’s action during or after the disciplinary process may well become one later, if the Association decides, at that subsequent stage, that it or its member is aggrieved".

The last sentence is significant for the purposes of this Dispute. The question then becomes, for the purposes of the preamble to clause 17, when did a grievance dispute or difference arise between the Employer and the Association.

The Association claims that the actions of the Employer breached the Preamble to clause 17. On its face this is an extremely wide assertion and in the context of the Reference must be read as meaning the actions of the Employer which relate to the termination of the Grievor’s employment.

The prospect of termination of employment became apparent or should have become apparent to the griever when she received the non performance report dated 28 March 2003 from the Town Clerk. The second paragraph of the memorandum from the Town Clerk to the Griever stated:

"Within this context your written response should show cause why the specific clause of the Master Agreement i.e. the consequence of the three warnings issued to you should not be implemented".

Although the grievor’s written response dated 31 March 2003 addresses a whole range of unrelated matters, it is apparent that she takes issue with the three warnings which had been issued.

However, more importantly, a letter dated 31 March 2003 from the Association to the Council indicates that the propriety of the warnings was in dispute.

A grievance or difference had arisen by or on 31 March 2003. From that point, the Preamble provides that work continues normally whilst the parties attempt to settle the grievance or difference in accordance with a laid down procedure.

The Tribunal accepts that the grievance in this dispute related to whether the Employer had properly followed the procedure set out in clause 16(c) when the three warnings were issued to the griever. This was, in the Tribunal’s opinion, a grievance contemplated by Clause 17 which activated both the requirements of the Preamble and the procedure set out in clauses 17 (a) to (e).

The grievor admitted that she had not activated the procedure in clause 17 on account of her failure to comply with clause 17 (a) which required her to first discuss the grievance with her Head of Department. However, it is noted that the grievor claimed that she did attempt to discuss the matter with her Head of Department, the Director Finance.

It was not disputed that the Employer had provided the Association with a copy of each of the three warning letters.

The General Secretary of the Association utilised the proviso to clause 17 when he wrote directly to the Town Clerk/Chief Executive Officer on 31 March 2003. However, this procedure is an additional avenue of communication which is available to the Association but does not dispense with the obligation on the parties to comply with the Preamble to and the procedures set out in clause 17.

The termination memorandum dated 9 April 2003 makes it quite clear that the grievor’s employment was being terminated with immediate effect under clause 16 (e) as a result of three warnings having been issued to the grievor under clause 16 (c) arising out of her failure on those three occasions to render satisfactory performance or put in the alternative, for non-performance, under clause 16 (a).

There are only 2 relevant grievances raised by the Association in its final submission. First the warnings were not issued in accordance with the procedure set out in clause 16(c). Secondly, the letter of termination was delivered prior to the grievance procedure being completed with particular reference to clause 17 (d).

The question of due investigation is raised in a general manner for the first time by the Association in its letter dated 31 March 2003. The Council responded to the question of due investigation in its letter dated 7 April 2003 to the Association.

In the Association’s letter dated 9 April 2003 there is no specific reference to the Council’s response concerning due investigation nor is there any general reference to the issue of improper investigations.

When Mr Toki cross-examined Mr Tabuya, he asked some questions concerning the proper person to sign written warnings. Mr Toki did not pursue the question of due investigation under the authority of an officer in charge.

These first two letters (dated 31 March and 7 April 2003) appear to represent the totality of the evidence in relation to the issue of due investigation. As the issue was not pursued in any detail during the hearing of the Dispute the conclusion to be drawn is that the Association was not in a position to contradict the Council’s assertions concerning due investigation which were set out in the response dated 7 April 2003. Consequently the Tribunal concludes that the required procedure under clause 16 (c) was satisfied and the warnings were properly issued . On the evidence adduced the Tribunal is also satisfied that in each case there were sufficient substantive grounds for administering formal warnings in writing to the grievor.

There is no evidence to support the assertions made by the Association in its final submissions concerning other issues relating to due investigation prior to the issuing of formal warnings.

Whilst the Association’s correspondence may well be viewed as raising other grievances, none of those were directly related to the issue of non-performance or failure to render satisfactory performance which formed the basis of the three formal warnings.

The grievance concerning due investigation by an officer in charge would therefore appear to have been resolved with the response from the Employer set out in its letter dated 7 April 2003. If there was no longer any live grievance in relation to that matter, there was no requirement to proceed to follow the grievance procedure in clause 17(a) – (e).

Furthermore, on the evidence (as distinct from the submissions) there does not appear to be any other grievance raised at the relevant time by the Association relating to the termination of the grievor’s employment which would require the parties to adhere to the various requirements of clause 17.

There remains one other matter for consideration.

As the grievor was summarily dismissed, the Tribunal must be satisfied that there was substantive justification for the dismissal and that the grievor was afforded procedural fairness.

It is the Tribunal’s opinion that summary dismissal can only take place if one or more of the four grounds listed in clause 16 (e) of the Agreement are established by the evidence.

As previously noted the four grounds listed in clause 16(e) are the same as four of the five grounds set out in section 28 of the Employment Act. If the evidence indicates that one of the four grounds in clause 16 (e) has been established then there has been compliance with section 28 of the Act. The agreement is consistent with the Act. Section 28 does not confer an unfettered right to summarily dismiss an employee where one of the grounds listed in the section has been established. What section 28 has done is to remove the common law right to dismiss summarily except where one of the grounds (a) – (e) has been established..

The termination memorandum is clear in that it is on account of the three warning letters having been issued that the grievor’s employment was summarily terminated. There is no reference to other warnings or incidents being a factor which the Council considered in reaching its decision to summarily dismiss.

It is the Tribunal’s opinion that the fact that three formal warnings have been issued to an employee is not by itself sufficient to dismiss summarily. The three warnings taken either together or separately must amount to conduct which comes within one of the four grounds in clause 16(e) of the agreement.

As previously noted, the Tribunal is satisfied that the warning letters were both procedurally proper and substantively appropriate. However that does not mean that any one or more of the grounds listed in clause 16(e) of the Agreement has been established.

The first formal warning was issued by a memorandum dated 7 March 2002. The warning was issued for failing to complete monthly rates reconciliations on time and competently. The second warning was issued by a memorandum dated 12 February 2003. This warning was issued for unsatisfactory performance of duties as Budget Officer with particular reference to a lack of care and skill in the preparation of budget estimates and programmes. The third warning was issued by a memorandum dated 24 March 2003. This warning was also issued for unsatisfactory performance in the preparation of estimates.

It may be argued that the cumulative effect of these three formal warnings is that one of the grounds set out in clause 16 (e) has been established. The most likely is ground (iii) which provides that summary dismissal can be imposed for habitual or substantial neglect of duties.

However the Tribunal is concerned about the inconsistency between the contents of the formal warnings contained in the three memoranda and the contents of the Grievor’s Annual Staff Report, which was made available to the Tribunal.

Although the Staff Report indicates, in the handwriting of the grievor, that it is a report for the period 1 January 2001 to 31 December 2001, Mr Prasad indicated to the Tribunal that the grievor had made an error. The Report was for the period 26 June 2001 to 26 June 2002. Mr Prasad relied upon a memorandum dated 29 July 2002 to the Grievor advising her of a decision to grant an increment increase in salary effective from 26 June 2002. He said that this was the last report prepared in relation to the grievor. Her next Staff Report would have been for the 12 months ending on 26 June 2003. Mr Toki indicated to the Tribunal that he did not dispute these matters.

In this Report the assessment of the grievor by her Reporting Officer in respect of the fifteen qualities required to be assessed does not reveal habitual or substantial neglect of duties. In most of the fifteen categories the grievor fits into the average category. In relation to her quality of work she was assessed as about the same as that of most employees of this grade and type of work. In relation to quantity she was assessed as able to complete average amount of work and works at a steady pace. In relation to figure work she was assessed as being competent. In relation to initiative and resourcefulness she was assessed at the highest level as having many ideas and can always counted on to provide a new approach. Her overall grading was fair and that was taken to mean that she performs duties only moderately well, just getting by.

Although assessed as not yet fitted for promotion she was considered eligible for an increment increase in salary. It is also interesting to note that the memorandum dated 29 July 2002 (referred to above) makes reference to the receipt of "a satisfactory report on your work performance for the previous 12 months".

After having considered the evidence and the material placed before it the Tribunal has concluded that the summary dismissal of the grievor was not substantively justified in the circumstances of this case. The Tribunal is not satisfied that a reasonable employer would have concluded that there were grounds for summary dismissal in the circumstances of this case. As a result the Tribunal is of the opinion that the Employer has not established any of the grounds in clause 16 (e) of the Agreement or section 28 of the Employment Act.

The final issue is to determine the appropriate remedy. Although re-instatement to the grievor’s previous position is the primary remedy of the Tribunal, it is not an automatic remedy. It remains a matter of discretion. Generally this Tribunal in deciding whether re-instatement is the appropriate remedy, has considered whether, objectively assessed, the grievor has the trust and confidence of her employer. The Tribunal should assess whether the grievor would be a harmonious and effective member of her employer’s team.

The evidence placed before the Tribunal indicated a degree of ill-feeling on the part of the grievor towards some senior staff of the Employer. A number of allegations were made by the grievor in respect of certain staff. On its part the Employer’s senior staff were clearly not happy with the grievor’s work performance. Under the circumstances, re-instatement would be inappropriate. The Employer is directed to pay to the grievor three (3) months salary as compensation.

AWARD

The Employer has not breached the Preamble to Clause 17 nor has it breached clause 17(d) for the reasons stated above.

The summary dismissal of the grievor was not substantively justified in the circumstances of this case.

The Employer is to pay three (3) months salary to the grievor by way of compensation as re-instatement is inappropriate in this case.

DATED at Suva this 6^th day of July 2004

Mr W D Calanchini
ARBITRATION TRIBUNAL